> For the complete documentation index, see [llms.txt](https://faq.blink.sv/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://faq.blink.sv/stablesats/how-does-stablesats-work.md).

# How does the Dollar Balance work in Custodial Mode?

In Custodial Mode, the Dollar Balance is powered by Stablesats. Stablesats uses Bitcoin derivatives markets — specifically perpetual inverse swap contracts — to create a synthetic US dollar position. Bitcoin is used as collateral to open a position that maintains a value of 1 US dollar, regardless of fluctuations in the Bitcoin price.

This allows users to hold, send, and receive dollar-equivalent value in their wallet without stablecoins or fiat integration. For details and risks, see the Terms and Conditions.

The [video](https://www.youtube.com/watch?v=FGO4dbwMYwg) outlines the basic mechanics of this strategy.

In Non-Custodial Mode, the Dollar Balance uses the USDB stablecoin (issued by Brale) on the Spark protocol. See the Terms and Conditions for details.


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